US Indexes Mostly Lower at Midday 01/26 11:41
Stocks were muted in afternoon trading on Wall Street Tuesday, as investors
weighed solid corporate earnings results against concerns about the virus
CHARLOTTE, N.C. (AP) -- Stocks were muted in afternoon trading on Wall
Street Tuesday, as investors weighed solid corporate earnings results against
concerns about the virus pandemic.
Blue chip companies like Johnson & Johnson and General Electric reported
better-than-expected results. Wall Street faces renewed worries that troubles
with COVID-19 vaccine rollouts and the spread of new variants of coronavirus
might delay a recovery from the pandemic.
The S&P 500 index fell 0.1% as of 12:17 p.m. Eastern. The Dow Jones
Industrial Average fell 7 points, or less than 0.1% to 30,953. The Nasdaq
composite was up 0.1%.
Investors are in the midst of quarterly earnings reporting season for U.S.
companies, and this is the busiest week so far. Dozens of large companies are
reporting this week, from all parts of the economy, including American Express,
J&J, Apple, GE and others.
More than 100 companies in the S&P 500 are scheduled to tell investors this
week how they fared during the last three months of 2020. As a whole, analysts
expect S&P 500 companies to say their fourth-quarter profit fell 5% from a year
earlier. That's a milder drop than the 9.4% they were forecasting earlier this
month, according to FactSet.
General Electric rose 2.5% after the industrial conglomerate reported a
surge in cash flow. GE is attempting a turnaround after shedding unprofitable
divisions and focusing more on big industrial products like jet engines and
power equipment. Typically, when a company is in turnaround, investors care
more about cash flow than quarterly profits because it shows the company is
able to pay down debts.
American Express fell 3% despite reporting stronger-than-expected earnings.
The company's card holders continue to postpone travel, entertainment and
dining out due to the pandemic, which has cut into its bottom line.
Traders are keeping a wary eye on rising coronavirus infections in various
countries and a bumpy rollout of vaccinations in the U.S. The spread of
variants that are thought to be more easily transmissible and might be less
effectively targeted by existing vaccines is adding to alarm.
Vaccine maker Moderna said Monday that it will study whether a booster shot
would be needed to protect against variants of the coronavirus, "out of an
abundance of caution."
"Nowadays the market mood is set by either the hopes that the COVID vaccine
would mark the end of the biggest economic downturn of our lifetime, or the
stimulus hopes to keep our heads above water. Yesterday, both hopes got
smashed," Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, said in a
President Joe Biden has proposed a $1.9 trillion plan to send $1,400 to most
Americans and deliver other support for the economy. But his party holds only
the slimmest possible majority in the Senate, making approval uncertain.
Several Republicans have already voiced opposition to parts of the plan.